PowerShares Readying More Low-Volatility ETFs

ETF Trends

Invesco PowerShares is preparing more low-volatility exchange traded funds, which have been a hit with investors seeking equity exposure with less risk.

S&P Dow Jones Indices recently launched the S&P MidCap 400 Low Volatility Index and the S&P SmallCap 600 Low Volatility Index. [Are Dividend and Low-Volatility ETFs Redundant?]

The benchmarks are designed to measure the performance of the least volatile stocks within their market segments. [Low-Volatility ETFs Help Limit Downside Risk]

Both indices have been licensed to Invesco PowerShares for the creation of ETFs. The firm manages the $2.8 billion PowerShares S&P 500 Low Volatility Portfolio (SPLV) , the oldest and largest low-volatility ETF. [Low-Volatility and Dividend ETFs for Yield]

SPLV’s tracking index consists of the 100 stocks from the S&P 500 with the lowest realized volatility over the past 12 months.

“The simple construction of the indices has resonated with investors,” says Vinit Srivastava, director of strategy indices at S&P Dow Jones Indices.

Vanguard’s incoming chief investment officer recently said the asset manager is considering launching its own low-volatility ETFs. [Vanguard Mulls Low-Volatility ETFs as Category Thrives]

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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